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The sudden drop on no immediate fundamental catalyst flushed millions of dollars worth of futures positions.

Over the past week, photos circulated on the internet showing a table stacked with hundreds of rare Pokemon trading cards organized neatly in rows — almost as if they were stolen straight off the printing line.

When someone attempted to sell the cards from Pokemon’s Fusion Strike set to Trading Card World, the sheer volume set alarm bells ringing. It also got NFT fans thinking. 

“It took them a month or two [for the seller to] provide a picture,” Scott Emer, co-founder of Trading Card World, told Polygon in an interview. “When they finally did, we were like, Well, this looks really weird.”

In a statement issued on Facebook, TCW said it contacted The Pokemon Company — which allegedly already knew the cards were missing — and worked together to retrieve and return them. A spokesperson for The Pokemon Company didn’t immediately respond to a request for comment on the alleged theft. 

Either way, fans of the Pokemon trading card game weren’t happy, with some now seeking a blockchain-based solution so this can’t happen again. 

Pokemon TCG fans react

Pokemon trading cards are distributed in blind packs — meaning buyers do not know what is inside. Even the manufacturer is kept in the dark.

Still, each pack is guaranteed to have one rare card. And some rares, such as those printed with a rainbow holographic theme or alternative art, are significantly rarer (and more valuable) than others.

It’s this blind nature of Pokemon card packs that feeds into the popularity of pack-opening videos on YouTube and other video streaming services. People love to watch and see if others get a hit card (or don’t).

Pokemon cards also aren’t cheap — especially in some countries outside of the United States. For example, one booster box containing 36 packs of Pokemon cards (360 single cards in total) costs 63,000 Hungarian forint ($185) in the central European country at retail. (Buyers in the U.S. can scoop the same boxes for roughly $120 on eBay).

For these reasons, some fans of the Pokemon Trading Card Game have vented their frustrations online over the apparent off-the-production-line theft of prized cards. Making matters worse is a long-standing complaint that pull rates for the most-prized cards feel very low — particularly for the set in question, Fusion Strike.

“The rarest card in Chilling Reign was a Alternate Art Vmax Blaziken,” one blog explained, claiming: “The pull rate on this Blaziken is about 1/450. The pull rate on the Alternate Art Vmax Mew in Fusion Strike is about 1/2,100. That means the rarest card in Fusion Strike is 4x harder to pull than the rarest card in Chilling Reign.”

NFTs ‘remove the need for trust’

All this has got some considering whether the future of Pokemon cards should be digital.  

While the distribution of physical cards is inherently somewhat opaque and tough to police, digital cards — particularly those existing as non-fungible tokens that may be verified on distributed public ledgers — don’t share the same issues.

“Blockchain tech removes the need for trust,” Nayn, a pseudonymous representative of the Echelon Prime Foundation, which promotes the growth of novel gaming models, explained in an interview.

This means no one can steal freshly printed (or minted) cards off the production line without the entire world seeing, they said, adding that newer trading card games like Parallel are already embracing the digital world. 

“Parallel Studios minted the entire base set of Parallel TCG cards on the Ethereum blockchain,” Nayn explained. “Distributed across six separate drops, the total supply of the base set can easily be tracked and on-chain randomness makes the distribution provably fair.”

“Additionally, by delivering the cards directly to consumers, this method eliminates the possibility of what happened with Pokemon cards,” they added.

Will The Pokemon Company make NFTs?

The Pokemon Company International itself may be looking at using blockchain technology to enhance its incredibly popular product.

In March, the shepherds of arguably the world’s most-valuable media brand — Pokemon has made upwards of $100 billion since its inception in the mid-1990s — listed a job position requiring candidates to understand web3 and blockchain technology.

The Pokemon Company didn’t immediately respond to a request for comment on its blockchain-related plans.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Securities and Exchange Commission Chair Gary Gensler refused to say whether ether, the second-largest cryptocurrency by market cap, was a security during a nearly five-hour hearing Tuesday.

Rising bitcoin prices mean a stronger balance sheet, higher stock prices and easier debt repayment, without the company needing to sell its holdings, the report said.

The experiment, called Project Meridian, shows it’s possible to settle large synchronized transactions in central bank money, a report said.

An entity connected to a wallet named “jaredfromsubway.eth” is sandwiching crypto traders, mainly those betting on tokens such as pepe and chad.

ALSO: Former CoinDesk head of research Noelle Acheson writes that longer-term narratives such as bitcoin’s recent store-of-value story matter but that price depends more on fleeting, often fickle sentiment.

Taylor Swift was one of the only celebrities who did their due diligence on crypto exchange FTX, according to the lawyer suing the now-bankrupt company’s celebrity promoters.

Attorney Adam Moskowitz has gone after basketball legend Shaquille O’Neal, football star Tom Brady, “Seinfeld” creator Larry David and more than a dozen other FTX promoters in a class action lawsuit that accuses them of promoting the sale of unregistered securities. 

Moskowitz is seeking $5 billion in the lawsuit, he said during an episode of The Scoop podcast with Frank Chaparro. He claims the exchange’s celebrity boosters didn’t do their due diligence to check whether they may be breaking the law before cutting TV and digital ads for FTX. 

“The one person I found that did that was Taylor Swift. In our discovery, Taylor Swift actually asked them, ‘Can you can you tell me that these are not unregistered securities?’” Moskowitz said. Swift reportedly came close to inking a $100 million sponsorship deal with FTX, but the partnership never materialized. Swift did not immediately respond to a request for comment.

FTX, Voyager, Binance

Moskowitz is leading several class action lawsuits targeting the promoters of major crypto companies, including the now-bankrupt firms FTX and Voyager Digital. On March 31, the Moskowitz Law Firm filed a class action against influencers who have promoted Binance, the world’s largest crypto exchange. 

The case targeting FTX celebrity promoters had been stalled for months as the firm struggled to serve O’Neal with official notice that he was being sued. It took three months and process servers in several states to track him down, despite the fact that O’Neal is a fixture on “The NBA on TNT” and is a touring DJ.

“The largest man on the planet, we can’t serve,” Moskowitz said. “In my 35 years of doing class action work, I’ve never had this issue before.”

Shaq is a sheriff’s deputy

Moskowitz went as far as to send a complaint to the sheriff’s office where O’Neal is a sheriff’s deputy in Central Florida in an attempt to serve him. The office allegedly cashed Moskowitz’s $50 check but did not serve O’Neal.

“They cashed our $50 and they said, ‘Sorry, we haven’t been able to serve him,’” Moskowitz said. O’Neal didn’t immediately respond to a request for comment.

The class action lawsuit claims that O’Neal and other celebrities promoted the sale of unregistered securities. The plaintiffs in the case are using a particularly broad Florida law in the case that prohibits the promotion of unregistered securities, and does not require the promoter to have been deceitful to be sued.  

“You promote an unregistered security for financial benefit, you are liable for all the rescissory damages,” Moskowitz said. 

For his part, O’Neal has said he’s staying away from crypto after FTX filed for bankruptcy protection in November, less than a year after he appeared in advertising for the firm. 

Moskowitz, who specializes in class action lawsuits, said he hopes celebrities and influencers are more careful about boosting crypto companies in the future.

“I mean, why would you possibly promote cryptocurrency if it may be an unregistered security? That’s just baffling to me,” Moskowitz said. “There’s a long list of influencers that promoted this. But you know, you’ve got to be realistic. I mean, I can’t go after 1,000 right now. So you go after the largest ones.” 

The Scoop episode featuring Adam Moskowitz will appear April 19 at 5 a.m. ET.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Securities and Exchange Commission Chair Gary Gensler continued to hint that ether, among other crypto tokens, may face increased scrutiny as an unregistered security. And with securities laws time-tested, the industry better get in line.

“If the public is anticipating profits based upon the efforts of others in a common enterprise, those are the indicia of a security,” Gensler said when asked by The Block why he declined to directly weigh in on whether the second-largest cryptocurrency by market capitalization is a security or a commodity. 

“Overall, these token operators they generally have websites, they generally have a group of individuals that are updating software, they often have Twitter accounts, they often hire lawyers, they often lobbyists who come and meet with members of the SEC and members of congressional staff,” Gensler said. “It kind of belies logic that there’s not some common group of promoters that are in the middle of this.”

The Republican chair of the House Financial Services Committee, Patrick McHenry, earlier pressed the SEC chair to provide more clarity on the topic, a seeming friction point between Gensler and fellow markets regulator Rostin Behnam, the chair of the Commodity Futures Trading Commission. In a recent enforcement action against crypto firm KuCoin, New York Attorney General Letitia James asserted that ether is an unregistered security, possibly opening Ethereum co-creator Vitalik Buterin and other early developers up to legal liability. 

“Give me a break, come on,” said McHenry during repeated attempts to get Gensler to provide further detail on ether. “There’s a lack of clarity here, can you at least agree with that?” 

‘Clarity’ in crypto

Gensler spoke to reporters following Tuesday’s hearing before that committee, during which he received a lengthy grilling from Republicans on digital assets, among other issues, as well as the occasional critical question from committee Democrats.

Asked by The Block whether more direct guidance on ether might make sense given conflicting views from policymakers on the cryptocurrency, including from a former SEC divisional head, Gensler responded that “this is a field that has clarity and mistakenly attempts to ignore it.” 

“The time-tested securities laws really are time-tested,” added Gensler. “And that’s why we need to ensure that a number of your readers, maybe even your owners, come into compliance with the securities laws.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The House Financial Services Committee has finally unveiled its stablecoin legislation, proposing a framework for stablecoin issuers such as Circle and Tether to define how their offerings can be regulated by state and federal entities, while calling for a temporary ban on algorithmic stablecoins.